Commenting on India's leading position, Vivek Gupta, Managing Director, A.T. Kearney India, says: "People continue to be India's greatest asset, particularly its large and educated labour force and still relatively low labour costs."

The problem areas are chronically high attrition levels and an uncertain tax and regulatory environment.

-Venkatesha Babu

ADVANTAGE INDIA

Attrition levels, tax and regulatory environment key challenges for India

Labour cost advantage declines

Certifications and security of IP are key strengths

Despite wage increases, cost advantage to continue for 20 more years

TOP OF MIND
Meet the Accounting Technician

What is it? ICAI has made a proposal to offer a new course to train Accounting Technicians.

What will they do? Accounting Technicians will take up the numerous accounting and finance roles below the Chartered Accountants and senior finance personnel.

Why are they needed? India's banking and financial services sector is growing at a scorching pace. There is a massive demand for people with accounting skills in the growing equity and bond markets, investment banking, and other emerging areas of finance. Accounting professionals are obviously needed in every other sector, too. Given the pass-out rate of 27-30 per cent for the CA course, ICAI feels accounting technicians will fill the growing gap between the demand and supply of accounting professionals.

Qualifications: ICAI has not made that public, but the course will draw upon 10+2 graduates from the commerce stream as well as college and university graduates with business studies, accounts and economics as their subjects of study.

-Kapil Bajaj

Money Laundering Tougher

Why? I-T authorities in Mumbai and Delhi have stumbled upon a huge money-laundering racket recently in which more than Rs 20,000 crore is believed to have been sent to Mauritius through the hawala route and then brought back as "legitimate" investments.

How? PMLA will make it incumbent upon financial intermediaries like banks and money changers to become Financial Action Task Force (FATF)-compliant. FATF is a global inter-governmental body developing and promoting policies to combat money laundering and terrorist financing.

When? The amendment, which is likely to be tabled in the current session of Parliament, will place strict reporting and record-keeping obligations on these entities.

-Amit Mukherjee

ECONOMY WATCH

Status: Over 8.3 per cent for a one-year FD.

Impact: Rising deposit rates are good for savers as they can get to earn more, but the firming up of rates will also make money dearer for all borrowers, whether retail or corporate, and increase the end prices of all goods.

WHEAT PRICES

Status: Rs 929 per quintal.

Impact: Falling wheat prices, which reacted to the government ban on wheat futures, are good news for consumers who have seen an across-the-board rise in commodity prices over the last two-to-three years. This will also positively impact industries that use wheat as an input.

-Compiled by Anand Adhikari

P-WATCH
A bird's eye view of what's hot and what's not on the government's policy radar.

COAL INDIA PLANS IPO

The coal sector is finally embracing the market, or so it appears. Coal India (CIL), the near-monopoly public sector coal major, is planning to float an IPO-5 per cent of its equity. Though quick to deny any such formal move, CIL Chairman Partha S. Bhattacharyya did indicate that he would "like to move into a quality adjusted import parity price regime."

The IPO rumbling could not be more appropriate-for the Eleventh Plan period (2007-2012), the reliance on coal to add power generation capacity is well over 50,000 mw, over twice the total capacity added during the last five years. Will the Left parties blink?

-Aman Malik

Mining the Market

CIL is likely to offload 5 per cent stake through the IPO route

Issue is expected to raise Rs 5,000-7,000 crore

CIL sells 78 per cent of its coal output to the power sector at half the global prices

RAILWAYS' LAND FOR REAL ESTATE

The overheated real estate market could do with a larger dose of this: Indian Railways (IR) is planning to deploy 500 acres of prime land for commercial exploitation across seven states. While Bandra (East) in Mumbai has been entrusted to Mumbai Rail Vikas Corporation (MRVC) for commercial use, another six sites in Mumbai are under study by the same organisation. While real estate developers are expected to flock to the auctions when the sites are ripe for the market, IR, too, expects to reap a bounty given the prevailing prices of real estate. The newly created Rail Land Development Authority (RLDA) is now evaluating 13 locations across seven states where shopping malls, office space, plazas and multiplexes will mushroom. With 1.7 lakh acres under its control, the current offering could just well be the aperitif. The main course, hopefully, will follow.

Amit Mukherjee

ALL SOUND AND NO FURY ON P-NOTES

Despite all the brouhaha about participatory notes, the government is paring down its concerns. P-notes are instruments issued by existing SEBI-registered FIIs to investors who do not have a presence in India but still want to invest. Certainly, there is room for tainted money to come in through P-notes, yet, the chances seem remote, the government believes. Why?

P-notes comprise just a third of the total market capitalisation of FII funds-itself less than a sixth of the total. And nearly two-thirds of the P-notes are issued by just 4-5 blue-chip FIIs, which are regulated entities not only in their home countries but also in India. In the normal course, these FIIs' Know Your Customer (KYC) norms and their compliance reports to SEBI should suffice to provide regulatory comfort. Given this context, the government is now considering ways of tweaking FII regulations so as to make them clearer and less cumbersome for entities adopting the P-notes currently. SEBI is expected to decide on the action required within the next month.

-Shalini S. Dagar